The appetite for risk fizzled on Tuesday

The appetite for risk fizzled on Tuesday, as the markets started focusing more on the upcoming tough negotiations between President Barack Obama and congressional leaders to avoid the “fiscal cliff”, however, these talks have a low likelihood of success. Politicians started to take their battle to the public, so a success would have more impact.

Most European and commodity currencies spiked up in Asia but then reversed. Meanwhile the yen is recovering further from last week’s 7-1/2-month low. The US stock markets made little progress. Gold, oil and silver ended barely changed.

The short-term outlook for the foreign currencies is sideways. The medium-term outlook for most of the foreign currencies is sideways. The LGR short-term model is short on all European currencies. Good luck!

Overnight

US: The Conference Board’s consumer confidence index climbed to 73.7 in November from an upwardly revised 73.1 in October.

US: Durable goods orders was flat in October after surging up by a revised 9.2% in September. Ex-transportation sector, orders rose by 1.5% in October following a 1.7% increase in the previous month.

US: The S&P/Case-Shiller 20-City Composite Home Price Index rose 3.0% annually in September compared to the 2.0% growth in August.

Today's economic calendar

Australia: Construction Work Done for the third quarter

EUR – December

The LGR Model: Long since November 12

The December euro ended lower after spiking up to 3 1/2-week high in Asia, but remains above the 21-day exponential moving average. The euro formed a short-term bullish reversal on November 13. The euro had peaked near a four-month high on September 17 and bottomed at an over two-year low in July.The short-term outlook is sideways. The medium-term outlook is sideways and my model is long.The 200-day exponential moving average supports at 1.2897 and the 21-day exponential moving average at 1.2866. Distant support is at 1.2739. Initial resistance is at 1.3012. Further resistance is at 1.3090.

JPY – December

The LGR Model: Short since September 28

The oversold December Japanese yen recovered further after reversing from a 7 ½-month low late last week. It trades well below the 21-day exponential moving average. The yen had peaked at a seven-month high on September 13. The short-term outlook is sideways. The medium-term outlook is bearish my model is short.Initial resistance is at 1.2240. The 21-day exponential moving average caps at a distant 1.2359. Immediate support is at 1.2074. Further support is at 1.2040.

INDICATORS

Fast stochastics: Slightly bullishMACD: BearishIchimoku: Bearish

OUTLOOK

NEAR-TERM: Sideways MEDIUM-TERM: BearishLONG-TERM: Bearish

GBP – December

The LGR Model: Long since November 12

The December pound has been making little progress since reaching a three-week high. It is swerving around the 21-day exponential moving average. The pound marked a new high for the uptrend on September and bottomed at a 4 1/2-month low on June 1. The short-term outlook is sideways. The medium-term outlook is sideways and my model is long. The 21-day exponentially smoothed moving average supports at 1.5977. Further support is at 1.5890. Initial resistance is at 1.6050. A medium-term peak is at 1.6173.

INDICATORS

Fast stochastics: Slightly bullishMACD: SidewaysIchimoku: Sideways

OUTLOOK

NEAR-TERM: Sideways MEDIUM-TERM: SidewaysLONG-TERM: Sideways

CHF – December

The LGR Model: Short since November 12

The December Swiss franc fell on Tuesday after rising to a five-week high late last week. It trades above the 21-day exponential moving average. The franc peaked at a high for the uptrend on October 17 and bottomed at a 19-month low on July 24. The short-term outlook is sideways. The medium-term outlook is slightly bullish and my model is long.The 200-day exponential moving average supports at 1.0730 and the 21-day exponential moving average at 1.0670. Distant support is at 1.0580. Friday’s high is 1.0837. The top of the uptrend is at 1.0861.

CAD – December

The LGR Model: Short since November 12

The December Canadian dollar is consolidating further around the 55-day exponential moving average after surging late last week. The Canadian dollar had marked a high for the uptrend on September 14 and a significant bottom on June 1.The short-term outlook is sideways. The medium-term outlook is sideways and my model is long. Immediate resistance is at 1.0085. Further resistance is at 1.0155. The 21-day exponential moving average supports at 1.0036. Further support is at .9936.

INDICATORS

Fast stochastics: BullishMACD: SidewaysIchimoku: Bearish

OUTLOOK

NEAR-TERM: Sideways MEDIUM-TERM: Sideways LONG-TERM: Sideways

AUD – December

The LGR Model: Long since October 16

The December Australian dollar resumed its uptrend after surging to an over two-month high late last week. It trades well above the 21-day exponential moving average. The latest leg of the uptrend started on June 4. The Aussie marked a high for the uptrend on September 14.The short-term outlook is slightly bullish. The medium-term outlook is slightly bullish and my model is long. Immediate resistance is at 1.0474. A significant peak is at 1.0537.Initial support is at 1.0405. The 21-day exponential moving average supports at 1.0366 and the 100-day exponential moving average at 1.0267.

Cornelius Luca is an author and President of Luca Global Research.
Mr. Cornelius Luca has been engaged in trading and consulting about global currency markets since 1983. He has taught courses covering the foreign exchange marketplace, foreign exchange trading, foreign exchange mathematics, currency futures and options, and technical analysis at New York University, the New York Institute of Finance, and the Lubin Graduate School of Business at Pace University.

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